Canlaon Alco to invest P5.2B on bioethanol plant

MANILA, Philippines - The Canlaon Alco Green Industrial Corp. will invest P5.192 billion on a bioethanol plant in Bago, Negros Occidental.

The multi-billion investment will receive six years worth of income tax holiday (ITH), Board of Investments (BOI) executive director Lucita P. Reyes said.

In an interview, Reyes said that the Bioethanol project is one of their banner investments for the first two months of the year. Reyes said this has helped propel their 185 percent investment growth for January to February when compared to the same period a year ago. BOI investments stood at P28.237 billion.

Canlaon has applied for incentives from the BOI and it has qualified for ITH under the Investment Priorities Plan (IPP) of the government.

The plant, which will be operational by December 2012, is expected to produce 52.2 million liters of bioethanol annually.

 However, Reyes said that despite this investment, the Philippines still lacks bioethanol. By 2012, the local demand for bioethanol will be 849 million liters. Reyes said that with the seven bioethanol plants currently operating, the production by 2012 will only be 193 million liters. Even with the 52.2 million of Canalaon, there is still a deficit.

“We still need to encourage more investments in biotheanol,” Reyes said.

Reyes said that Canlaon will be supplying the bioethanol to local petrol companies.

The project has been certified by the Sugar Regulatory Authority (SRA). The certification is needed to ensure that the identified plantation is not used for food. Canlaon has a growing agreement with the farmers of Bago. This covers 2,300 hectares of land which will be able to produce 161,000 metric tons of raw sugar cane per year.

Aside from the bioethanol, the production will have a byproduct of purified carbon dioxide. This will be sold to beverage companies, Reyes said.

The project, excluding the farmers, will employ 160 workers.